Judith Waltz Quoted on Health Care Bankruptcies – 'It doesn’t necessarily mean the end of operations'

Foley & Lardner LLP partner Judith Waltz assessed a recent surge of health care bankruptcy cases priming an environment for acquisitions in the Law360 article, “Bankruptcy Sets Stage For Big Healthcare Buying Frenzy.”

Waltz, who is co-chair of Foley’s Health Care Practice Group, said that while the acquisition of a health care business’ assets under Chapter 11 bankruptcy can be a boon to a larger entity looking to increase its footprint or offer additional services as part of the hub-and-spoke model of health care, this method of expansion can lead to regulatory concerns.

“A sale that makes sense in bankruptcy may still have to go through the state attorney general’s approval,” Waltz said. “Somebody may think they’re buying something at a good price, but the regulatory hurdles make it too expensive.”

Waltz noted that mergers and acquisitions are not the only path forward for a distressed entity. “It doesn’t necessarily mean the end of operations. Chapter 11 can be an opportunity to streamline or to reorganize,” Waltz added. “It really is an option that is a good thing to have. It’s a safety valve in many respects.”

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